Airwallex sets up for IPO by 2026

Airwallex, the Melbourne-born fintech unicorn, is preparing to list publicly over the next two years according to one of its cofounders.

The international payments business, last valued at US$5.5 billion (A$8.5bn) when it raised US$100 million in late 2022, turns 10 next year, having raised US$902 million in the seven years since it was founded in 2015.

Its backers include Square Peg, Salesforce Ventures, Sequoia Capital China, Lone Pine Capital, Hermitage Capital, 1835i Ventures and Tencent, as well as super fund Hostplus and Atlassian cofounders Mike Cannon-Brookes and Scott Farquhar through their private investment funds.

Founder and CEO Jack Zhang told the AFR that the company is “going to get IPO ready in the next two years”, but added that “there is no immediate plan to go public”.

Zhang owned around 14.1% of the company according to 2022 figures, making him a potential billionaire with a stake potentially work around A$1.17 billion.

The potential floats comes as another privately owned unicorn, Canva, contemplates how to provide its early stage backers with an exit, a decade on.

Canva cofounder Cliff Orbrecht has acknowledged that the company is “certainly at the scale where we could IPO”, with a 2025 float being pondered, but in the meantime, around US$1 billion (A$1.49bn) worth of shares owned by staff and early-stage investors, including local VCs, are set to change hands in the coming weeks as a secondary market sale.

That sale is believed to maintain Canva’s existing valuation of US$25.5 billion (A$38bn), set in August 2022. Last August, as its first fund approached the end of its decade-long life, Blackbird sold a $150 million stake in Canva – 3% of its total holding – at the same valuation to New York’s Coatue Management and San Francisco’s ICONIQ Capital. Canva is three years older than Airwallex, having been founded in 2012, and has been profitable since 2017.

Zhang told the AFR he expects Airwallex to post a profit in 2023 from around $350 million of annual recurring revenue, with hopes of processing A$80 billion in annualised transactions in the next 12 months.

However, there have been whispers that a high-pressure culture within the international payments business led to high staff turnover and stress.

But Zhang countered that those issues were being addressed and employee engagement in Australia went from 52% in the first six months of 2023 to 72% in the second half according to staff surveys.

The holding company for Airwallex is based in the opaque tax haven of the Cayman Islands, reportedly a condition of receiving backing from offshore investors including Alibaba’s Gobi Partners.

It’s nearly 12 months since Airwallex added former Stripe and Morgan Stanley execs to its leadership team as well as appointing ex-PM Scott Morrison’s former press secretary Nick Creevey, as Associate Director of Corporate Affairs for ANZ.